Wednesday, August 15, 2012

Salaries of new law grads have been bimodal for some time (at least since 2000), with the high mode being hires at large law firms. That mode, which is very narrow (all the big firms pay the same wage) has stayed at $160,000/year for the last several years. Here's a report from the NALP: Salaries for New Lawyers: An Update on Where We Are and How We Got Here by Judith N. Collins.

The paper contains graphs of the salary distributions for 1991, 1996, 2000, 2006, and 2011.

"As the 1990s progressed, the curve
maintained its basic shape, though
salary increases at large firms gradually moved more of the salaries to the right of the $70,000 mark. In 1996, salaries of $75,000 and $85,000 became more common than salaries of $70,000, but $75,000 and $85,000 still each represented just 6% of salaries, and 45% of salaries were in the $30,000 to $40,000 range.

"In 1998 and 1999, the marker again moved to the right, to $90,000, and about 6% of salaries. This corresponds with a period of salary increases, moving the median at firms of 251+ lawyers from $72,000 in 1995 to over $90,000 in 1999. The shift notwithstanding, the overall distribution maintained the basic, though
lopsided, bell shape.

That shape changed dramatically
in 2000 as large firms increased
their starting salaries to $125,000.
Beyond just the amount of the
increase, of more consequence for
the salary distribution was how
widespread the increase was.
Suddenly nearly 14% of salaries
were reported at $125,000, a
proportion that can only be partially
explained by an increasing
percentage of jobs taken in large
firms. The result was, for the first
time, two peaks, with the other
encompassing the $30,000 to
$50,000 range. Thus, even though
the peak to the left was now fatter
and accounted for more salaries —
48% versus the 14% at $125,000 —
never before had a single salary so
dominated the landscape. The
$125,000 peak remained through
2005."
************

See previous posts on the various markets for lawyers, which are pretty interesting (the markets if not the posts...). For one thing, the market for new associates at big law firms is unraveled in time, with new hires most often coming through the pipeline as second year summer associates, presently being hired at the beginning of their second year of law school.